Misclassification of Workers in Iowa

The misclassification of workers as “independent contractors” rather than “employees” is a growing problem in Iowa and across the nation. The misclassification of workers threatens Iowa’s economy, its businesses and its workers - which are the most important resource we have.

Iowa employers must report wages to Iowa Workforce Development (IWD) Operations Division and pay unemployment insurance (UI) tax on wages paid to employees as required. Iowa employers must generally withhold State and Federal income taxes, as well as withhold and pay Social Security and Medicare taxes.

Intentional misclassification constitutes tax and insurance evasion. Employers misclassifying their workers may face the following consequences:

penalties and fines

interest on back taxes

criminal charges under various laws​

Reporting Suspected Misclassification of Workers

The Misclassification Report form 69-0009 may be used to report suspected misclassification of a worker. The completed form may be submitted by US mail, fax or email. You may also report suspected misclassification of workers by telephone.